Apple Inc. unveiled two new iPhones Tuesday, including a low-end $99 (U.S.) version, as the company unveiled a risky strategy designed to ward off competitors and capture emerging markets like China and India.

The question, analysts said in the wake of the unveiling, is whether the updated high-end model phone and the new lower-cost model are priced appropriately. If they’re not, the company risks “cannibalizing” its portfolio if customers massively flock to the cheaper iPhone.

As well as dealing with different models, the tech giant is juggling developed and emerging markets, where phone prices paid by consumers differ greatly, based on whether carriers offer contracts that subsidize the cost.

“Within Canada, Apple has a good opportunity with this new launch, in the second half of the year,” said Krista Napier, senior mobility analyst for IDC Canada. “Worldwide, it’s a bit of a different story.”

She said the cheaper 5C iPhone – made of plastic in five colours and running on the new iOS 7 operating system – will likely appeal to all types of Canadians who want the Apple brand but previously couldn’t afford it.

The high-end 5S will also be desirable to many, she said, who want the latest gadget, complete with a fingerprint identity sensor, upgraded camera and 64-bit A7chip, designed to make the phone faster.

But some analysts warn the lowest price, for a 5C, isn’t low enough for China and other key countries.

How pricing will work across the three models (the 5C, 5S and the older but popular 4S), and in different markets, is so far unclear. Apple did not answer questions about contract and non-contract pricing in Canada, the U.S. and China on Tuesday afternoon.

In a statement, Apple said the 16 GB 5C on a two-year plan with a U.S. carrier could be sold for $99 (U.S.) and the 32 GB for $199 (U.S.).

Canadian contract prices weren’t available. But Apple’s Canadian website said unlocked 16 GB 5Cs would cost $599, while 32 GB would go for $719. Unlocked 5S phones in Canada will cost $719 for a 16 GB and $819 for 32 GB.

Apple is leaving consumers with a third phone option as well. The 4S, the iPhone version released in 2011, will be available for $0 on a two-year plan in the U.S. An unlocked 8 GB 4S will cost $450 here, according to the Canadian website.

Tero Kuittinen, a tech analyst with telecom consulting firm Alekstra in Manhattan, said the prices don’t vary enough for success in emerging markets, particularly in China.

“They basically launched two high-end phones,” Kuittinen said, adding existing high-end smartphone growth is waning so new emerging markets are essential to continued growth for all smartphone makers.

“($99 on a plan is) fine for North America but in most of the world . . . people pay the full price of the phone,” he said.

Apple’s shares fell Tuesday afternoon following its 1 p.m. announcement at its Cupertino, California headquarters. Shares were down 2.28 per cent, to close at $494.64 (U.S.) Tuesday, down from $506.20 (U.S.) at the open.

Kuittinen said he still expects a further announcement from Apple, early Wednesday in Beijing, about a long-anticipated partnership with the world’s largest mobile provider, China Mobile, which could boost sentiment for the company.

Among Apple’s Tuesday announcements was a partnership with Japanese operator, NTT DoCoMo, which means the new phones will be available there later this month.

The 5C and 5S – in gold, silver and grey – will be released in the U.S., Canada, China, Japan and other countries on Sept. 20. Pre-orders begin this Friday.

But Ben Wood, an analyst with CCS Insight, said both the 4S and 5C could have prominent roles in China now.

“You have to remember, in China, it’s a huge population,” he said. “There are people who are affluent . . . having something that stands out, a brightly coloured iPhone against your ear, will have quite a lot of appeal.”

He said there’s a “huge pent up demand for new iPhones” in existing markets so initial sales will be good, and there will still be time to adjust prices if necessary. But Wood did have a word of caution for Apple.

“They have to be very careful that there’s enough differentiation between the 5S at the top and the 5C,” he said, “so that the 5C doesn’t end up cannibalizing the flagship device.”

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